NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the
“Partnership”) today reported its fourth quarter and full year
fiscal 2022 results. The Partnership reported a loss from
continuing operations of $29.4 million for the quarter ended March
31, 2022 and $184.1 million for its full fiscal year 2022.
Highlights for the quarter and fiscal year ended March 31, 2022
include:
- Produced water volumes processed of approximately 1.93 million
barrels per day during the quarter ended March 31, 2022, growing
37.7% from the same period in the prior year and 4.7% versus the
preceding fiscal quarter
- Water Solutions Adjusted EBITDA1 of $342 million, an increase
of $100.5 million, or 42%, year-over-year
- Adjusted EBITDA1 from continuing operations for the fourth
quarter of Fiscal 2022 of $157.4 million compared to $94.3 million
for the fourth quarter of Fiscal 2021
- Fiscal Year 2022 Adjusted EBITDA1 from continuing operations of
$542.5 million compared to $448.3 million in the prior year
- Announced a new long-term produced water transportation,
recycling and disposal agreement with a leading investment grade
independent producer. The new dedicated agreement spans an area of
over 300,000 acres in New Mexico and Texas, bringing our total
dedicated acreage portfolio in the Delaware Basin to over 660,000
acres.
“The Partnership had a strong finish to its Fiscal 2022 and
continues to see positive momentum as we move into our 2023 fiscal
year. Produced water volumes approximated 2.1 million barrels per
day in April, 2.2 million barrels per day in May and are expected
to exceed this level for the remainder of Fiscal 2023. We achieved
our first $90 million Adjusted EBITDA1 quarter in Water Solutions
segment and anticipate Adjusted EBITDA1 for the Water Solutions
segment of over $400 million for the upcoming fiscal year, assuming
current producer activity levels and commodity prices. This is an
increase of $15 million from our previous guidance of $385 million.
We have worked incredibly hard over the past few years to build the
premier water solutions asset position in the best basin in the
country and we are beginning to realize the benefit of those
efforts,” stated Mike Krimbill, NGL’s CEO. “The Partnership expects
total Adjusted EBITDA1 of at least $600 million and capital
expenditures of approximately $100 million for Fiscal 2023.
Assuming stable commodity prices, we expect the resulting free cash
flow to total approximately $280 million, which we plan to use to
repay our Senior Notes due 2023. We will update the market on our
progress towards these goals as the year goes on,” Krimbill
concluded.
____________________________
1 See the “Non-GAAP Financial Measures”
section of this release for the definition of Adjusted EBITDA (as
used herein) and a discussion of this non-GAAP financial
measure.
Quarterly Results of Operations
The following table summarizes operating income (loss) and
Adjusted EBITDA1 from continuing operations by reportable segment
for the periods indicated:
Quarter Ended
March 31, 2022
March 31, 2021
Operating Income
(Loss)
Adjusted EBITDA1
Operating Income
(Loss)
Adjusted EBITDA1
(in thousands)
Water Solutions
$
34,645
$
90,279
$
(79,217
)
$
57,979
Crude Oil Logistics
7,092
54,459
6,303
22,176
Liquids Logistics
10,349
24,546
19,103
26,467
Corporate and Other
(13,637
)
(11,870
)
(16,166
)
(12,343
)
Total
$
38,449
$
157,414
$
(69,977
)
$
94,279
Water Solutions
Operating income for the Water Solutions segment increased
$113.9 million for the quarter ended March 31, 2022, compared to
the quarter ended March 31, 2021. The Partnership processed
approximately 1.93 million barrels of water per day during the
quarter ended March 31, 2022, a 37.7% increase when compared to
approximately 1.40 million barrels of water per day processed
during the quarter ended March 31, 2021. This increase was due to
higher production volumes (and associated produced water) primarily
in the Delaware Basin driven by the recovery in crude oil prices
from the prior year. The Partnership also sold approximately
146,000 barrels per day of produced and recycled water for use in
our customers’ completion activities.
Revenues from recovered crude oil, including the impact from
realized skim oil hedges, totaled $26.4 million for the quarter
ended March 31, 2022, an increase of $14.3 million from the prior
year period. This increase was due to increased skim oil barrels
sold due to higher produced water volumes processed as well as
higher realized crude oil prices received from the sale of skim oil
barrels.
Operating expenses in the Water Solutions segment decreased to
$0.28 per produced barrel processed compared to $0.29 per barrel in
the comparative quarter last year primarily due to continued
efforts to manage operating costs per barrel along with higher
produced water volumes processed. Two of the Water Solutions
segment’s largest variable expenses, utility and royalty expenses,
were not (and are not expected to be) impacted by the rise in
inflation due to negotiating long-term utility contracts with fixed
rates and royalty contracts with no escalation clauses.
Crude Oil Logistics
Operating income for the fourth quarter of Fiscal 2022 increased
slightly compared to the same quarter in Fiscal 2021. Our margins
continued to benefit from high crude oil prices, which increase
contracted rates with certain producers, and realized gains on the
sale of inventory due to rapidly increasing crude oil prices. This
was offset by our losses from derivatives which increased by $33
million for the quarter ended March 31, 2022, compared to the
quarter ended March 31, 2021, a portion of which is expected to be
realized in Adjusted EBITDA1 during the quarter ending June 30,
2022.
During the three months ended March 31, 2022, physical volumes
on the Grand Mesa Pipeline averaged approximately 74,000 barrels
per day, compared to approximately 66,000 barrels per day for the
three months ended March 31, 2021. This increase was due primarily
to the new supply agreement with a term customer, which commenced
in March 2021.
As a part of continued efforts to optimize the Partnership’s
asset portfolio, we sold certain of our crude trucking assets
during the quarter, which generated a $5.5 million gain on the sale
of assets.
Liquids Logistics
Operating income for the Liquids Logistics segment decreased
$8.8 million for the quarter ended March 31, 2022, compared to the
quarter ended March 31, 2021. This decrease is mainly related to
lower product margins on propane due to reduced demand, increased
competition and lower product allocations from certain suppliers,
as well as lower service revenues due to the sale of Sawtooth and
less throughput in certain of our terminals. The decrease was
offset by higher product margins for butane and refined products as
a result of tighter supply markets and volatility caused by the
geopolitical unrest.
Propane volumes decreased by 87.8 million gallons, or 18.4%,
compared to the quarter ended March 31, 2021, due to the warm
winter weather in our core operating areas, increased competition
and lower allocations of product from certain suppliers. Butane
volumes decreased by 19.2 million gallons, or 10.7%, due to the
tight supply market and an increase in demand for exports.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based
revolving credit facility (“ABL Facility”)) was approximately
$232.7 million as of March 31, 2022. On March 31, 2022, the
Partnership reported $116.0 million in outstanding borrowings on
its ABL Facility, compared to $4.0 million in outstanding
borrowings at March 31, 2021. This increase was due to higher
working capital requirements as a result of increased commodity
prices, a portion of which was funded using free cash flow. On
April 13, 2022, the ABL Facility was amended to increase, under the
accordion feature, the commitments to $600 million with an
agreement to lower the commitments back to $500 million on or
before March 31, 2023.
As of March 31, 2022, the Partnership is in compliance with all
of its debt covenants and has no significant current debt
maturities before November 2023. The Partnership expects to
generate approximately $280 million of excess cash flow in Fiscal
2023, which it plans to use to repay outstanding indebtedness and
improve leverage.
Fourth Quarter Conference Call Information
A conference call to discuss NGL’s results of operations is
scheduled for 4:00 pm Central Time on Monday, June 6, 2022.
Analysts, investors, and other interested parties may join the
webcast via the event link:
https://www.webcaster4.com/Webcast/Page/2808/45661 or by dialing
(888) 506-0062 and providing access code: 956840. An archived audio
replay of the call will be available for 14 days, which can be
accessed by dialing (877) 481-4010 and providing access code
45661.
NGL filed its Annual Report on Form 10-K for the year ended
March 31, 2022 with the Securities and Exchange Commission after
market on June 6, 2022. A copy of the Form 10-K can be found on the
Partnership’s website at www.nglenergypartners.com. Unitholders may
also request, free of charge, a hard copy of our Form 10-K and our
complete audited financial statements.
Non-GAAP Financial Measures
NGL defines EBITDA as net income (loss) attributable to NGL
Energy Partners LP, plus interest expense, income tax expense
(benefit), and depreciation and amortization expense. NGL defines
Adjusted EBITDA as EBITDA excluding net unrealized gains and losses
on derivatives, lower of cost or net realizable value adjustments,
gains and losses on disposal or impairment of assets, gains and
losses on early extinguishment of liabilities, equity-based
compensation expense, acquisition expense, revaluation of
liabilities, certain legal settlements and other. NGL also includes
in Adjusted EBITDA certain inventory valuation adjustments related
to TransMontaigne Product Services, LLC (“TPSL”), our refined
products business in the mid-continent region of the United States
(“Mid-Con”) and our gas blending business in the southeastern and
eastern regions of the United States (“Gas Blending”), which are
included in discontinued operations, and certain refined products
businesses within NGL’s Liquids Logistics segment, as discussed
below. EBITDA and Adjusted EBITDA should not be considered
alternatives to net loss, loss from continuing operations before
income taxes, cash flows from operating activities, or any other
measure of financial performance calculated in accordance with
GAAP, as those items are used to measure operating performance,
liquidity or the ability to service debt obligations. NGL believes
that EBITDA provides additional information to investors for
evaluating NGL’s ability to make quarterly distributions to NGL’s
unitholders and is presented solely as a supplemental measure. NGL
believes that Adjusted EBITDA provides additional information to
investors for evaluating NGL’s financial performance without regard
to NGL’s financing methods, capital structure and historical cost
basis. Further, EBITDA and Adjusted EBITDA, as NGL defines them,
may not be comparable to EBITDA, Adjusted EBITDA, or similarly
titled measures used by other entities.
Other than for the Mid-Con, and Gas Blending businesses, which
are included in discontinued operations, and certain businesses
within NGL’s Liquids Logistics segment, for purposes of the
Adjusted EBITDA calculation, NGL makes a distinction between
realized and unrealized gains and losses on derivatives. During the
period when a derivative contract is open, NGL records changes in
the fair value of the derivative as an unrealized gain or loss.
When a derivative contract matures or is settled, NGL reverses the
previously recorded unrealized gain or loss and record a realized
gain or loss. NGL does not draw such a distinction between realized
and unrealized gains and losses on derivatives of the Mid-Con, and
Gas Blending businesses, which are included in discontinued
operations, and certain businesses within NGL’s Liquids Logistics
segment. The primary hedging strategy of these businesses is to
hedge against the risk of declines in the value of inventory over
the course of the contract cycle, and many of the hedges cover
extended periods of time. The “inventory valuation adjustment” row
in the reconciliation table reflects the difference between the
market value of the inventory of these businesses at the balance
sheet date and its cost, adjusted for the impact of seasonal market
movements related to our base inventory and the related hedge. NGL
includes this in Adjusted EBITDA because the unrealized gains and
losses associated with derivative contracts associated with the
inventory of this segment, which are intended primarily to hedge
inventory holding risk and are included in net income, also affect
Adjusted EBITDA. In NGL’s Crude Oil Logistics segment, they
purchase certain crude oil barrels using the West Texas
Intermediate (“WTI”) calendar month average (“CMA”) price and sell
the crude oil barrels using the WTI CMA price plus the Argus CMA
Differential Roll Component (“CMA Differential Roll”) per NGL’s
contracts. To eliminate the volatility of the CMA Differential
Roll, NGL entered into derivative instrument positions in January
2021 to secure a margin of approximately $0.20 per barrel on 1.5
million barrels per month from May 2021 through December 2023. Due
to the nature of these positions, the cash flow and earnings
recognized on a GAAP basis will differ from period to period
depending on the current crude oil price and future estimated crude
oil price which are valued utilizing third-party market quoted
prices. NGL is recognizing in Adjusted EBITDA the gains and losses
from the derivative instrument positions entered into in January
2021 to properly align with the physical margin we are hedging each
month through the term of this transaction. This representation
aligns with management’s evaluation of the transaction.
Distributable Cash Flow is defined as Adjusted EBITDA minus
maintenance capital expenditures, income tax expense, cash interest
expense, preferred unit distributions and other. Maintenance
capital expenditures represent capital expenditures necessary to
maintain the Partnership’s operating capacity. For the CMA
Differential Roll transaction, as discussed above, we have included
an adjustment to Distributable Cash Flow to reflect, in the period
for which they relate, the actual cash flows for the positions that
settled that are not being recognized in Adjusted EBITDA.
Distributable Cash Flow is a performance metric used by senior
management to compare cash flows generated by the Partnership
(excluding growth capital expenditures and prior to the
establishment of any retained cash reserves by the Board of
Directors) to the cash distributions expected to be paid to
unitholders. Using this metric, management can quickly compute the
coverage ratio of estimated cash flows to planned cash
distributions. This financial measure also is important to
investors as an indicator of whether the Partnership is generating
cash flow at a level that can sustain, or support an increase in,
quarterly distribution rates. Actual distribution amounts are set
by the Board of Directors.
Forward-Looking Statements
This press release includes “forward-looking statements.” All
statements other than statements of historical facts included or
incorporated herein may constitute forward-looking statements.
Actual results could vary significantly from those expressed or
implied in such statements and are subject to a number of risks and
uncertainties. While NGL believes such forward-looking statements
are reasonable, NGL cannot assure they will prove to be correct.
The forward-looking statements involve risks and uncertainties that
affect operations, financial performance, and other factors as
discussed in filings with the Securities and Exchange Commission.
Other factors that could impact any forward-looking statements are
those risks described in NGL’s Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and other public filings. You are
urged to carefully review and consider the cautionary statements
and other disclosures made in those filings, specifically those
under the heading “Risk Factors.” NGL undertakes no obligation to
publicly update or revise any forward-looking statements except as
required by law.
NGL provides Adjusted EBITDA guidance that does not include
certain charges and costs, which in future periods are generally
expected to be similar to the kinds of charges and costs excluded
from Adjusted EBITDA in prior periods, such as income taxes,
interest and other non-operating items, depreciation and
amortization, net unrealized gains and losses on derivatives, lower
of cost or net realizable value adjustments, gains and losses on
disposal or impairment of assets, gains and losses on early
extinguishment of liabilities, equity-based compensation expense,
acquisition expense, revaluation of liabilities and items that are
unusual in nature or infrequently occurring. The exclusion of these
charges and costs in future periods will have a significant impact
on the Partnership’s Adjusted EBITDA, and the Partnership is not
able to provide a reconciliation of its Adjusted EBITDA guidance to
net income (loss) without unreasonable efforts due to the
uncertainty and variability of the nature and amount of these
future charges and costs and the Partnership believes that such
reconciliation, if possible, would imply a degree of precision that
would be potentially confusing or misleading to investors.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership, is a
diversified midstream energy company that transports, stores,
markets and provides other logistics services for crude oil,
natural gas liquids and other products and transports, treats and
disposes of produced water generated as part of the oil and natural
gas production process.
For further information, visit the Partnership’s website at
www.nglenergypartners.com.
NGL ENERGY PARTNERS LP AND
SUBSIDIARIES
Unaudited Consolidated Balance
Sheets
(in Thousands, except unit
amounts)
March 31,
2022
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
3,822
$
4,829
Accounts receivable-trade, net of
allowance for expected credit losses of $2,626 and $2,192,
respectively
1,123,163
725,943
Accounts receivable-affiliates
8,591
9,435
Inventories
251,277
158,467
Prepaid expenses and other current
assets
159,486
109,164
Total current assets
1,546,339
1,007,838
PROPERTY, PLANT AND EQUIPMENT, net of
accumulated depreciation of $887,006 and $776,279, respectively
2,462,390
2,706,853
GOODWILL
744,439
744,439
INTANGIBLE ASSETS, net of accumulated
amortization of $507,285 and $517,518, respectively
1,135,354
1,262,613
INVESTMENTS IN UNCONSOLIDATED ENTITIES
21,897
22,719
OPERATING LEASE RIGHT-OF-USE ASSETS
114,124
152,146
OTHER NONCURRENT ASSETS
45,802
50,733
Total assets
$
6,070,345
$
5,947,341
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable-trade
$
1,084,837
$
679,868
Accounts payable-affiliates
73
119
Accrued expenses and other payables
140,719
170,400
Advance payments received from
customers
7,934
11,163
Current maturities of long-term debt
2,378
2,183
Operating lease obligations
41,261
47,070
Total current liabilities
1,277,202
910,803
LONG-TERM DEBT, net of debt issuance costs
of $42,988 and $55,555, respectively, and current maturities
3,350,463
3,319,030
OPERATING LEASE OBLIGATIONS
72,784
103,637
OTHER NONCURRENT LIABILITIES
104,346
114,615
CLASS D 9.00% PREFERRED UNITS, 600,000 and
600,000 preferred units issued and outstanding, respectively
551,097
551,097
EQUITY:
General partner, representing a 0.1%
interest, 130,827 and 129,724 notional units, respectively
(52,478
)
(52,189
)
Limited partners, representing a 99.9%
interest, 130,695,970 and 129,593,939 common units issued and
outstanding, respectively
401,486
582,784
Class B preferred limited partners,
12,585,642 and 12,585,642 preferred units issued and outstanding,
respectively
305,468
305,468
Class C preferred limited partners,
1,800,000 and 1,800,000 preferred units issued and outstanding,
respectively
42,891
42,891
Accumulated other comprehensive loss
(308
)
(266
)
Noncontrolling interests
17,394
69,471
Total equity
714,453
948,159
Total liabilities and equity
$
6,070,345
$
5,947,341
NGL ENERGY PARTNERS LP AND
SUBSIDIARIES
Unaudited Consolidated
Statements of Operations
(in Thousands, except unit and
per unit amounts)
Three Months Ended March
31,
Year Ended March 31,
2022
2021
2022
2021
REVENUES:
Water Solutions
$
147,777
$
95,318
$
544,866
$
370,986
Crude Oil Logistics
789,839
493,467
2,505,496
1,721,636
Liquids Logistics
1,595,631
1,163,333
4,897,553
3,133,146
Corporate and Other
—
313
—
1,255
Total Revenues
2,533,247
1,752,431
7,947,915
5,227,023
COST OF SALES:
Water Solutions
12,189
1,063
33,980
9,622
Crude Oil Logistics
761,055
462,732
2,352,932
1,515,993
Liquids Logistics
1,565,361
1,108,758
4,752,400
2,966,391
Corporate and Other
—
453
—
1,816
Total Cost of Sales
2,338,605
1,573,006
7,139,312
4,493,822
OPERATING COSTS AND EXPENSES:
Operating
77,925
72,094
285,535
254,562
General and administrative
17,397
19,791
63,546
70,468
Depreciation and amortization
66,575
67,572
288,720
317,227
Loss on disposal or impairment of assets,
net
791
83,684
94,254
475,436
Revaluation of liabilities
(6,495
)
6,261
(6,495
)
6,261
Operating Income (Loss)
38,449
(69,977
)
83,043
(390,753
)
OTHER INCOME (EXPENSE):
Equity in earnings of unconsolidated
entities
635
804
1,400
1,938
Interest expense
(67,636
)
(60,651
)
(271,640
)
(198,799
)
Gain (loss) on early extinguishment of
liabilities, net
682
(60,984
)
1,813
(16,692
)
Other income (expense), net
251
(39,563
)
2,254
(36,503
)
Loss From Continuing Operations Before
Income Taxes
(27,619
)
(230,371
)
(183,130
)
(640,809
)
INCOME TAX (EXPENSE) BENEFIT
(1,791
)
1,154
(971
)
3,391
Loss From Continuing Operations
(29,410
)
(229,217
)
(184,101
)
(637,418
)
Loss From Discontinued Operations, net of
Tax
—
(23
)
—
(1,769
)
Net Loss
(29,410
)
(229,240
)
(184,101
)
(639,187
)
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
50
(447
)
(655
)
(632
)
NET LOSS ATTRIBUTABLE TO NGL ENERGY
PARTNERS LP
$
(29,360
)
$
(229,687
)
$
(184,756
)
$
(639,819
)
NET LOSS FROM CONTINUING OPERATIONS
ALLOCATED TO COMMON UNITHOLDERS
$
(56,269
)
$
(253,180
)
$
(288,630
)
$
(730,683
)
NET LOSS FROM DISCONTINUED OPERATIONS
ALLOCATED TO COMMON UNITHOLDERS
$
—
$
(23
)
$
—
$
(1,767
)
NET LOSS ALLOCATED TO COMMON
UNITHOLDERS
$
(56,269
)
$
(253,203
)
$
(288,630
)
$
(732,450
)
BASIC LOSS PER COMMON UNIT
Loss From Continuing Operations
$
(0.43
)
$
(1.96
)
$
(2.22
)
$
(5.67
)
Loss From Discontinued Operations, net of
Tax
$
—
$
—
$
—
$
(0.01
)
Net Loss
$
(0.43
)
$
(1.96
)
$
(2.22
)
$
(5.68
)
DILUTED LOSS PER COMMON UNIT
Loss From Continuing Operations
$
(0.43
)
$
(1.96
)
$
(2.22
)
$
(5.67
)
Loss From Discontinued Operations, net of
Tax
$
—
$
—
$
—
$
(0.01
)
Net Loss
$
(0.43
)
$
(1.96
)
$
(2.22
)
$
(5.68
)
BASIC WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
130,371,691
129,395,184
129,840,234
128,980,823
DILUTED WEIGHTED AVERAGE COMMON UNITS
OUTSTANDING
130,371,691
129,395,184
129,840,234
128,980,823
EBITDA, ADJUSTED EBITDA AND
DISTRIBUTABLE CASH FLOW RECONCILIATION
(Unaudited)
The following table reconciles NGL’s net
loss to NGL’s EBITDA, Adjusted EBITDA and Distributable Cash Flow
for the periods indicated:
Three Months Ended March
31,
Year Ended March 31,
2022
2021
2022
2021
(in thousands)
Net loss
$
(29,410
)
$
(229,240
)
$
(184,101
)
$
(639,187
)
Less: Net loss (income) attributable to
noncontrolling interests
50
(447
)
(655
)
(632
)
Net loss attributable to NGL Energy
Partners LP
(29,360
)
(229,687
)
(184,756
)
(639,819
)
Interest expense
67,652
60,664
271,689
198,823
Income tax expense (benefit)
1,791
(1,153
)
971
(3,444
)
Depreciation and amortization
66,591
66,921
287,943
314,476
EBITDA
106,674
(103,255
)
375,847
(129,964
)
Net unrealized losses (gains) on
derivatives
33,277
(291
)
(14,977
)
47,366
CMA Differential Roll net losses (gains)
(1)
6,751
—
67,738
—
Inventory valuation adjustment (2)
6,497
(169
)
8,409
1,224
Lower of cost or net realizable value
adjustments
8,226
3,111
10,862
(30,102
)
Loss on disposal or impairment of assets,
net
791
83,677
94,059
476,601
(Gain) loss on early extinguishment of
liabilities, net
(683
)
60,984
(1,851
)
16,692
Equity-based compensation expense (3)
(8
)
1,049
(1,052
)
6,727
Acquisition expense (4)
—
796
67
1,711
Revaluation of liabilities (5)
(6,495
)
6,261
(6,495
)
6,261
Class D Preferred Unitholder consent fee
(6)
—
40,000
—
40,000
Other (7)
2,384
2,086
9,909
11,135
Adjusted EBITDA
$
157,414
$
94,249
$
542,516
$
447,651
Adjusted EBITDA - Discontinued Operations
(8)
$
—
$
(30
)
$
—
$
(621
)
Adjusted EBITDA - Continuing
Operations
$
157,414
$
94,279
$
542,516
$
448,272
Less: Cash interest expense (9)
63,482
57,178
254,619
185,138
Less: Income tax expense (benefit)
1,791
(1,154
)
971
(3,391
)
Less: Maintenance capital expenditures
21,414
6,520
59,468
28,787
Less: CMA Differential Roll (10)
5,563
—
54,817
—
Less: Preferred unit distributions
paid
—
23,770
—
77,678
Less: Other (11)
—
(9
)
—
—
Distributable Cash Flow - Continuing
Operations
$
65,164
$
7,974
$
172,641
$
160,060
(1)
Adjustment to align, within Adjusted
EBITDA, the net gains and losses of the Partnership’s CMA
Differential Roll derivative instruments positions with the
physical margin being hedged. See “Non-GAAP Financial Measures”
section above for a further discussion.
(2)
Amount reflects the difference between the
market value of the inventory at the balance sheet date and its
cost, adjusted for the impact of seasonal market movements related
to our base inventory and the related hedge. See “Non-GAAP
Financial Measures” section above for a further discussion.
(3)
Equity-based compensation expense in the
table above may differ from equity-based compensation expense
reported in the footnotes to our consolidated financial statements
included in the Partnership’s Annual Report on Form 10-K for the
year ended March 31, 2022. Amounts reported in the table above
include expense accruals for bonuses expected to be paid in common
units, whereas the amounts reported in the footnotes to our
consolidated financial statements only include expenses associated
with equity-based awards that have been formally granted.
(4)
Amounts represent expenses we incurred
related to legal and advisory costs associated with
acquisitions.
(5)
Amounts for the three months ended March
31, 2022 and 2021 and years ended March 31, 2022 and 2021 represent
the non-cash valuation adjustment of contingent consideration
liabilities, offset by the cash payments, related to royalty
agreements acquired as part of acquisitions in our Water Solutions
segment.
(6)
Represents the fee paid to the holders of
the Class D Preferred Units to obtain their consent in order to
complete the issuance of the 2026 Senior Secured Notes and the ABL
Facility (as discussed in the footnotes to our consolidated
financial statements included in the Partnership’s Annual Report on
Form 10-K for the year ended March 31, 2022).
(7)
Amounts for the three months and years
ended March 31, 2022 and 2021 represent non-cash operating expenses
related to our Grand Mesa Pipeline, unrealized losses on marketable
securities and accretion expense for asset retirement
obligations.
(8)
Amounts include the operations of TPSL,
Gas Blending and Mid-Con.
(9)
Amounts represent interest expense payable
in cash for the period presented, excluding changes in the accrued
interest balance.
(10)
Amount represents the cash portion of the
adjustments of the Partnership’s CMA Differential Roll derivative
instrument positions, as discussed above, that settled during the
period.
(11)
Amounts represent cash paid to settle
asset retirement obligations.
ADJUSTED EBITDA RECONCILIATION BY
SEGMENT
(Unaudited)
Three Months Ended March 31,
2022
Water
Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate
and
Other
Consolidated
(in thousands)
Operating income (loss)
$
34,645
$
7,092
$
10,349
$
(13,637
)
$
38,449
Depreciation and amortization
50,092
11,460
3,305
1,718
66,575
Amortization recorded to cost of sales
—
—
68
—
68
Net unrealized losses (gains) on
derivatives
4,807
30,144
(1,674
)
—
33,277
CMA Differential Roll net losses
(gains)
—
6,751
—
—
6,751
Inventory valuation adjustment
—
—
6,497
—
6,497
Lower of cost or net realizable value
adjustments
—
2,246
5,980
—
8,226
Loss (gain) on disposal or impairment of
assets, net
6,148
(5,307
)
—
(50
)
791
Equity-based compensation expense
—
—
—
(8
)
(8
)
Other income, net
102
3
84
62
251
Adjusted EBITDA attributable to
unconsolidated entities
804
—
23
45
872
Adjusted EBITDA attributable to
noncontrolling interest
(225
)
—
1
—
(224
)
Revaluation of liabilities
(6,495
)
—
—
—
(6,495
)
Other
401
2,070
(87
)
—
2,384
Adjusted EBITDA
$
90,279
$
54,459
$
24,546
$
(11,870
)
$
157,414
Three Months Ended March 31,
2021
Water
Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate
and
Other
Continuing Operations
Discontinued Operations (TPSL,
Mid-Con, Gas Blending)
Consolidated
(in thousands)
Operating (loss) income
$
(79,217
)
$
6,303
$
19,103
$
(16,166
)
$
(69,977
)
$
—
$
(69,977
)
Depreciation and amortization
48,427
10,334
7,026
1,785
67,572
—
67,572
Amortization recorded to cost of sales
—
—
77
—
77
—
77
Net unrealized losses (gains) on
derivatives
975
4,233
(5,499
)
—
(291
)
—
(291
)
Inventory valuation adjustment
—
—
(202
)
—
(202
)
—
(202
)
Lower of cost or net realizable value
adjustments
—
(213
)
3,357
—
3,144
—
3,144
Loss (gain) on disposal or impairment of
assets, net
80,357
(248
)
3,346
229
83,684
—
83,684
Equity-based compensation expense
—
—
—
1,049
1,049
—
1,049
Acquisition expense
10
—
—
786
796
—
796
Other income (expense), net
7
50
297
(39,917
)
(39,563
)
—
(39,563
)
Adjusted EBITDA attributable to
unconsolidated entities
1,136
—
8
(109
)
1,035
—
1,035
Adjusted EBITDA attributable to
noncontrolling interest
(330
)
—
(1,071
)
—
(1,401
)
—
(1,401
)
Revaluation of liabilities
6,261
—
—
—
6,261
—
6,261
Class D Preferred Unitholder consent
fee
—
—
—
40,000
40,000
—
40,000
Other
353
1,717
25
—
2,095
—
2,095
Discontinued operations
—
—
—
—
—
(30
)
(30
)
Adjusted EBITDA
$
57,979
$
22,176
$
26,467
$
(12,343
)
$
94,279
$
(30
)
$
94,249
Year Ended March 31,
2022
Water
Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate
and
Other
Consolidated
(in thousands)
Operating income (loss)
$
94,851
$
45,033
$
(8,441
)
$
(48,400
)
$
83,043
Depreciation and amortization
214,558
48,489
18,714
6,959
288,720
Amortization recorded to cost of sales
—
—
281
—
281
Net unrealized losses (gains) on
derivatives
11,652
(23,664
)
(2,965
)
—
(14,977
)
CMA Differential Roll net losses
(gains)
—
67,738
—
—
67,738
Inventory valuation adjustment
—
—
8,409
—
8,409
Lower of cost or net realizable value
adjustments
—
2,235
8,627
—
10,862
Loss (gain) on disposal or impairment of
assets, net
25,598
(3,101
)
71,807
(50
)
94,254
Equity-based compensation expense
—
—
—
(1,052
)
(1,052
)
Acquisition expense
4
—
—
63
67
Other income, net
718
353
711
472
2,254
Adjusted EBITDA attributable to
unconsolidated entities
2,363
—
14
(145
)
2,232
Adjusted EBITDA attributable to
noncontrolling interest
(2,212
)
—
(528
)
—
(2,740
)
Revaluation of liabilities
(6,495
)
—
—
—
(6,495
)
Other
921
9,064
(65
)
—
9,920
Adjusted EBITDA
$
341,958
$
146,147
$
96,564
$
(42,153
)
$
542,516
Year Ended March 31,
2021
Water
Solutions
Crude Oil
Logistics
Liquids Logistics
Corporate
and
Other
Continuing Operations
Discontinued Operations (TPSL,
Mid-Con, Gas Blending)
Consolidated
(in thousands)
Operating (loss) income
$
(92,720
)
$
(304,330
)
$
70,441
$
(64,144
)
$
(390,753
)
$
—
$
(390,753
)
Depreciation and amortization
222,107
60,874
29,184
5,062
317,227
—
317,227
Amortization recorded to cost of sales
—
—
307
—
307
—
307
Net unrealized losses (gains) on
derivatives
24,500
23,432
(566
)
—
47,366
—
47,366
Inventory valuation adjustment
—
—
1,197
—
1,197
—
1,197
Lower of cost or net realizable value
adjustments
—
(29,458
)
(617
)
—
(30,075
)
—
(30,075
)
Loss on disposal or impairment of assets,
net
76,942
384,143
3,350
11,001
475,436
—
475,436
Equity-based compensation expense
—
—
—
6,727
6,727
—
6,727
Acquisition expense
27
—
—
1,684
1,711
—
1,711
Other income (expense), net
266
1,565
1,301
(39,635
)
(36,503
)
—
(36,503
)
Adjusted EBITDA attributable to
unconsolidated entities
3,019
—
(3
)
(252
)
2,764
—
2,764
Adjusted EBITDA attributable to
noncontrolling interest
(1,647
)
—
(2,887
)
—
(4,534
)
—
(4,534
)
Revaluation of liabilities
6,261
—
—
—
6,261
—
6,261
Class D Preferred Unitholder consent
fee
—
—
—
40,000
40,000
—
40,000
Intersegment transactions (1)
—
—
(27
)
—
(27
)
—
(27
)
Other
2,751
8,317
100
—
11,168
—
11,168
Discontinued operations
—
—
—
—
—
(621
)
(621
)
Adjusted EBITDA
$
241,506
$
144,543
$
101,780
$
(39,557
)
$
448,272
$
(621
)
$
447,651
(1)
Amount reflects the transactions with
TPSL, Mid-Con and Gas Blending that are eliminated in
consolidation.
OPERATIONAL DATA
(Unaudited)
Three Months Ended
Year Ended
March 31,
March 31,
2022
2021
2022
2021
(in thousands, except per day
amounts)
Water Solutions:
Produced water processed (barrels per
day)
Delaware Basin
1,664,140
1,212,453
1,531,830
1,148,582
Eagle Ford Basin
99,299
63,871
99,298
78,397
DJ Basin
142,628
101,116
142,611
111,016
Other Basins
20,091
21,210
24,179
26,596
Total
1,926,158
1,398,650
1,797,918
1,364,591
Recycled water (barrels per day)
145,944
45,017
93,487
43,503
Total (barrels per day)
2,072,102
1,443,667
1,891,405
1,408,094
Skim oil sold (barrels per day)
3,468
2,525
2,864
1,957
Crude Oil Logistics:
Crude oil sold (barrels)
8,064
8,146
31,091
38,349
Crude oil transported on owned pipelines
(barrels)
6,653
5,961
28,410
32,797
Crude oil storage capacity - owned and
leased (barrels) (1)
5,232
5,239
Crude oil inventory (barrels) (1)
1,339
1,201
Liquids Logistics:
Refined products sold (gallons)
190,661
188,368
776,797
834,717
Propane sold (gallons)
389,823
477,652
1,034,706
1,364,224
Butane sold (gallons)
160,386
179,601
588,032
655,256
Other products sold (gallons)
86,828
119,654
376,906
471,245
Natural gas liquids and refined products
storage capacity - owned and leased (gallons) (1)
156,219
427,975
Refined products inventory (gallons)
(1)
1,090
1,223
Propane inventory (gallons) (1)
37,719
51,026
Butane inventory (gallons) (1)
19,825
20,066
Other products inventory (gallons) (1)
18,614
19,195
(1)
Information is presented as of March 31,
2022 and March 31, 2021, respectively.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220605005110/en/
NGL Energy Partners LP Linda J. Bridges, 918-481-1119 Executive
Vice President, Chief Financial Officer and Treasurer
Linda.Bridges@nglep.com
or
David Sullivan, 918-481-1119 Vice President - Finance
David.Sullivan@nglep.com
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